Canadian M&A Perspectives Private and Public Mergers & Acquisitions | Private Equity

Monthly Archives: November 2011

What’s the Best Way to a Billion: M&A or IPO?

Posted in Public M&A, Strategy

Unless you’ve been living under a rock for some time, you’ll recall the exchange in The Social Network between Sean Parker, Mark Zuckerberg and Eduardo Saverin: “this is no time to take your chips down. A million dollars isn’t cool. You know what’s cool? A billion dollars.”

If you’re an entrepreneur or investor with audacious plans and ambition – it’s on your mind. What’s the best way to a billion dollars? Is it through an initial public offering or an M&A sale transaction? These are good questions to have to ask yourself if your business is growing fast and you’re … Continue Reading

The Implied Covenant of Good Faith and Fair Dealing: Delaware Rocks On

Posted in Contractual Matters

Earlier this month, the Delaware Court of Chancery released its opinion in Winshall v. Viacom International, Inc. The Court dismissed a claim for breach of the implied covenant of good faith and fair dealing in a merger agreement. The sellers of Harmonix Music Systems, Inc., the creator of the music-oriented video games Rock Band and Guitar Hero, alleged that the buyer, Viacom, breached this implied covenant in connection with an earn-out provision contained in the merger agreement.

The earn-out provision provided the sellers of Harmonix with an opportunity to earn additional cash payments from Viacom in the two years following … Continue Reading

There’s Some Optimism Out There – Survey of Private Equity and Venture Capital Professionals Finds a Positive Investment Climate in Canada

Posted in Private Equity

Despite challenging capital markets and general economic uncertainty, signs point to increasing optimism among the Canadian private equity and venture capital investing community, according to a recent survey conducted jointly by McCarthy Tétrault and the Canadian Venture Capital & Private Equity Association (CVCA). 
 
Members of the CVCA were surveyed from November 9-18 on such topics such as their investment planning and  exit planning expectation and their views of the investment climate in Canada and abroad.
 
We presented the survey results at the CVCA’s professional development session, “Fasten Your Seatbelts: Investing and Exiting in Turbulent Times” held on November … Continue Reading

OSC Dialogue 2011: Significant New OSC Policy Projects on M&A Matters Discussed

Posted in Public M&A, Shareholders

After a few years on hiatus, the Ontario Securities Commission hosted its “Dialogue” conference once again on November 1, 2011. OSC Dialogue opened with a speech from the Chair of the Ontario Securities Commission, Howard Wetston, and filled the morning with two panel discussions, one on market infrastructure and another on strategic issues in investor protection.

The OSC Dialogue’s lunch hour was scheduled with a speech from The Honourable Dwight Duncan, Ontario’s Minister of Finance, as well as a speech from Ian Russell, President and CEO of the Investment Industry Association of Canada.

Of particular interest though for this blog … Continue Reading

Materiality in Securities Legislation: Four Points from the Supreme Court of Canada

Posted in Public M&A

One of the issues in securities law generally is what constitutes “materiality”. In a later post we will discuss “material adverse change” clauses in M&A agreements, but this post is about the fundamental question of what is “material”. A recent case of the Supreme Court of Canada, Sharbern Holding Inc. v. Vancouver Airport Centre Ltd. provides some guidance. In Sharbern, the Supreme Court looked at the test of what constitutes a “material false statement.” While the Court was looking at a real estate related statute, the principles are similar under securities laws. Sharbern imposes burdens on plaintiffs and issuers … Continue Reading

The Use of Global Depositary Receipts for an Acquisition of a Canadian Public Company – Part 2

Posted in Public M&A

In my previous post, I outlined some of the features of a Global Depositary Receipts (GDRs) program that was utilized by HRT Participações S.A. (HRT), a Brazilian-based and listed exploration and production company, in its acquisition of UNX Energy Corp., a Calgary-based TSXV listed exploration and production company with oil and gas assets located in offshore Namibia. GDRs can be a mechanism to overcome a number of issues that may be encountered in structuring an international public M&A deal. In this post, I will outline some of the potential pitfalls in implementing a GDR structure.

Tax Implications
 
GDR structures … Continue Reading

The Use of Global Depositary Receipts for an Acquisition of a Canadian Public Company – Part 1

Posted in Public M&A

Depositary receipts, which are a type of security that is traded on a stock exchange but which represent an interest in an underlying security that is issued by a publicly traded company in another jurisdiction, have been around since the 1920s in the form of American Depositary Receipts (ADRs), and more recently, in the form of Global Depositary Receipts (GDRs). GDRs are a means for companies to raise their profile with foreign investors, make their shares more easily available to foreign investors and raise new capital outside of a domestic market. Many companies have ADRs listed on the New York … Continue Reading

7 Tips For Hiring the Right Investment Banker

Posted in Public M&A

So you are on the board of a public company that has decided to explore strategic alternatives, including a potential sale of the company. Or perhaps you are the CEO of a company who is looking at a significant strategic acquisition or divestiture of a business unit or division. You have a great team of lawyers at your disposal to advise on legal and structuring matters but you need to find the right investment banker to provide sound financial advice, including potentially a fairness opinion.  Here’s a list of things to look for that I’ve developed with significant input from

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